Texas Power (Austin, Howe: sales, buy, sales tax)

[oldtoiletsmkgdflrpots]

On the Texas Power statement it says in the box after the amount due: "The average price you paid for electric service this month is 10.9 kWh. This average price may include recurring TDU Delivery Charges for non-residential premises."

I called them and still don't understand. If we are on a fixed rate how could we have "paid for" service that is more than the fixed rate? In other words our fixed rate is lower than the 10.9 kWh but the wording states we paid 10.9.

[Trainwreck20]

This is on the TXU website (apparently you are not the only one with a question about it ). While this is on the TXU site, it looks as if it would apply to any provider.

TDU Delivery Charges | TXU Energy

It looks as if you are contracted to pay a certain amount for electricity (which will vary by provider), but you will also pay a transmission fee that is independent of the provider. I.e., your electric company charged you exactly what you contracted for, but they are also acting as a billing agent for the distribution provider. They do not affect or control that rate, nor does your provider get that money (or that is what it looks like to me).

[oldtoiletsmkgdflrpots]

Thanks for that explanation. I'm not saying I understand, I'm just saying thanks for the explanation.

Texas Power is the bill we get.
ONCOR is what? We don't get a bill from ONCOR

And how can they tell us it's a fixed rate when it seems it isn't? And, when renewing our six month commitment with Texas Power they didn't say anything about a variable rate. It was very clear to me it was fixed, would not change until the six month period is up and then we look to see if the price is up or down or if we want to renew.

I'm sure there is an explanation I can understand...I'm just not there yet.

[Trainwreck20]

Texas Power is charging you the rate they said they would (or so I assume) to generate the power for you; however, another company (not Texas Power) is charging you to basically deliver the power that you bought. Their rate is approved by the PUC, but unlike the generator (Tx Power for you), you do not have a choice of who distributes the power. I am assuming you are saying ONCOR is your distributor? They are a distributor, so I am guessing that is why you are asking? Anyway, no matter what rate you worked out with your generator (Tx Power or other), they would add the same amount per kWh to your bill.

[oldtoiletsmkgdflrpots]

Yes, ONCOR is the distributor. However, what I'm not getting is we signed on for 6 months for a "fixed" rate. What had me baffled was this blurb on the bill:

"The average price you paid for electric service this month is (insert KWh). This average price may include recurring TDU Delivery Charges for non-residential premises."

Sorry I'm being so redundant but I still don't get how this works. I talked to Texas Power to renew a contract at a fixed rate. A fixed rate to this idiot is something that does not change. Instead I see it's a variable rate. To my understanding a variable rate does change.

I'm just sayin somewhere along the line shouldn't the person you talk to regarding sign-up for their "fixed rate" tell you it really isn't fixed at all but variable? Or, that you will have other charges?

Ok, so maybe dumb it down even more for me because I'm still lost.

Texas Power is the company I spoke to regarding billing and cost. We signed on for 6 months at a fixed rate. What does Texas Power actually do? What is their role in being the electric company?

Then there is ONCOR. Evidently they "own" the poles?? Are they the ones charging at the variable rate? What does ONCOR actually do? And, why do they need both Texas Power and ONCOR to get things done?

I also don't know what PUC stands for...well, unless we're playing hockey here.

[Trainwreck20]

Then there is ONCOR. Evidently they "own" the poles?? Are they the ones charging at the variable rate?

Yes, you nailed it. Tx Power is charging you a fixed rate - the one you signed on to. They have no control over ONCOR and only pass those costs directly on to you via their bill.

PUC is the Public Utility Commission (Public Utility Commission of Texas) and they approve rate changes for distributors (or that is what I get from the TXU link).

Tx Power is either an actual power generator (they own and operate physical power plants - gas, coal, wind, etc) or they are a 'middle man' (they buy power off the grid and re-sell). I honestly don't know which they are, since I am not in a deregulated market. I suspect they are the latter, since I can't recall any power plants owned by 'Texas Power', but it is hard to know how they hold the plants - they could be under other names, etc.

We had a former Austin Energy employee give a presentation on how ERCOT (Energy Reliability Council of Texas) controls the grid and how the price of fuel (specifically, low natural gas) is affecting the power companies. It really is quite interesting.

[oldtoiletsmkgdflrpots]

Then shouldn't someone let you know when signing up that ONCOR, (in this instance) will be charging you too and you're really not going to get a fixed rate at all? Or, do you just grow up knowing this because you live in Texas?

[Trainwreck20]

Um, sort of. The fixed rate deal is competitive, so you can shop around for the best deal. The ONCOR cost is fixed, so regardless of what deal you get, that price will not change. Think of it like a sales tax - when you see prices advertised at Target, for instance, they never include sales tax in the ads, since that is not in the control of Target and the money is not going to Target anyway. If they say something costs $19.99, when you go to the register you pay $21.64 (or whatever the tax marks it up to) but you do not think "hey, they said this was $19.99, their ad was wrong".

OTOH, I agree, I would not have known there was a 'distribution' charge on electricity if I had not looked at your post and googled it, since AE has an integrated production and distribution setup.